Advisors warn against overreacting to stock market dips due to trade talks

KANSAS CITY, Mo. -- Stock prices dropped and then rose Wednesday in reaction to ongoing talks between the United States and China. Eventually, the major U.S. stock indexes finished above where they started. 

Financial advisors said they expect fluctuations and corrections in the market, especially after what many described as an abnormally positive year in 2017.

Francis Duff, who works with Baird Financial's Kansas City office, said perspective on market fluctuations changes depending on your age and the status of your investments and 401(k). 

He said investors in their 20s and 30s shouldn't worry. They'll have plenty of time to recover from any losses over the next several decades. 

Duff said investors closer to retirement may consider cashing out some stocks, but warned against overreacting and stressed the importance of working with a professional to develop a plan that protects investments from normal market ups and downs. 

"We as individuals, we don't have any control over it. We do have control over the amount of money we're putting into our 401(k). We have to have our plans in place," Duff said. 

When the market corrects itself with drops in prices, the initial reaction is to wince. But Duff said investors can take advantage. The strategy in the stock market is to buy low. 

"Like a child eating peas, they don't like it, but they're good for you. These [corrections] can be good for you, too. If you're a long-term investor, you're able to buy stocks at a low price, marvelous companies at adjusted prices," Duff said. 

Until China and the United States actually implement the tariffs they've talked about, brokers don't expect much of a significant impact on market prices.  

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